9911796707
TMI Blog2000 (2) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... Krishnamurthy Swami, A. Subba Rao, P. Parmeshwaran, Y.P. Mahajan, Shivram, S.N. Terdol, C.V. Subba Rao, V.K. Verma, M.K. Michael, Ejaz Maqbool, P. Parmeshwaran, Sameer Parekh, for the appearing parties. JUDGMENT Leave granted in S.L.P. (Civil) No. 16223/1985. 2. The common question raised in all these cases relates to the applicability of Rules 10 and 10A of the Central Excise Rules. The cases were heard together with the consent of learned Counsel for parties and they are being disposed of by this common judgment. For the sake of brevity the relevant facts are stated with reference to Civil Appeal No. 2132 of 1994 : 3. M/s Kolhapur Sugar Mills Limited, a holding company, had been in the business of production of sugar at Kolhapur since the year 1933-34. The appellant M/s Kolhapur Cane Sugar Works Ltd., was registered as a subsidiary of the said holding company in the year 1972. The holding company bifurcated their activities whereby the activity pertaining to manufacture and sale of sugar was transferred to the appellant company by a Resolution passed in their Extra-ordinary General Meeting held on 19-10-1972. Consequent upon this change the appellant, on 9-10-1973 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was stated in the order sanctioning the rebate that the amount sanctioned should be credited in the personal ledger account of the appellants and utilized for payment of Central Excise duty. 7. In the meanwhile the petitioner had also filed an appeal against the order dated 26th May, 1975, rejecting the application for rebate under Notification No. 146/74 dated 12th October, 1974. This appeal was later on withdrawn by the appellants on or about 29th July, 1976. 8. As the matter stood thus the notice dated 27th April, 1977 was issued by the Superintendent, Central Excise, A.G.1 Kolhapur, which reads as follows :- "NOTICE TO SHOW CAUSE To M/s Kolhapur Canesugar Works Ltd. Kashba Savada, Kolhapur Whereas the Kolhapur Cane Sugar Works Ltd., Kolhapur Holder of L4 No.2/Sug/93 had presented their claim on 12-7-1976 for rebate of Central Excise duty on Sugar produced in excess during the season 1973-74 by them as new factory commencing production for the first time after 1-10-1973 as per provision of S. No. 6 of the table of Notification No. 189/73 dated 4-10-1973 and that they were granted a rebate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, it would be presumed that they do not desire a personal hearing. 5. If no cause is shown against the action proposed to be taken within ten days of the receipt of this notice, or they do not appear before the Assistant Collector, Central Excise, Kolhapur, when the case posted for hearing, the case will be decided on ex-parte. Sd/- Superintendent, Central Excise 27-4-1977 AG1, Kolhapur" 9. After considering the submissions of the appellant in reply to the show cause notice the Assistant Collector of Central Excise, by his order dated 15/27 October, 1977 confirmed the demand for recredit of the aforesaid amount of Rs. 61,14,930/- that was taken into credit by the appellants in their personal ledger account. Before the order dated 15/27th October, 1977 could be passed by the Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Director of Enforcement, New Delhi, 1970. (1) SCR 639. In that case this Court was dealing with the provisions of Rule 132A of the Defence of India Rules, 1962 and it was held that the provisions of Section 6 of General Clauses Act could not be made applicable to the repeal of the Rules and that the said provisions are applicable only to the repeal of a Central Act or Regulation. The said decision in Rayala Corporation (supra) has been considered and explained by various Benches in various High Courts. The said decisions are under challenge in this group of matters. Having regard to the importance of the question, we consider it appropriate that this matter is considered by the Constitution Bench. It is therefore, directed that the matter be placed before the Hon'ble Chief Justice of India for appropriate directions in this regard." 12. In the factual backdrop of the case discussed earlier the question that arises for determination is whether after omission of the old Rules 10 and 10A and its substitution by the new Rule 10 by the Notification No. 267/77 dated 6-8-1977 the proceedings initiated by the notice dated 27-4-1977 could be continued in law. If the question i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly refunded or any duty assessed has not been paid in full. No provision regarding residuary power was made in the Rules. 16. Section 11A which was inserted with effect from 17-11-1980 vide Notification No.182/80-C.E., dated 15-11-1980, by Section 21 of the Customs, Central Excise and Salt and Central Board of Revenue (Amendment) Act, 1978 (25 of 1978) reads as follows : "11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture of punishment may be imposed as if the repealing Act or Regulation had not been passed. 18. The term 'Central Act' has been defined in Section 3(7) which shall mean an Act of Parliament; and shall include - (a) an Act of the Dominion legislature or of the Indian legislature passed before the commencement of the Constitution, and (b) an Act made before such commencement by the Governor-General-in-Council or the Governor General, acting in a legislative capacity. 19. The term "enactment" is defined in Section 3(19) as "enactment" shall include a Regulation (as hereinafter defined and any Regulation of the Bengal, Madras or Bombay Code and shall also include any provision contained in any Act or in any such Regulation as aforesaid). 20. The term "Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e incompetent after 6-8-1977. Reliance was placed on the decision in Rayala Corporation (supra). The High Court after considering the effect of omission of Rules 10 and 10A with effect from 6-8-1977 and the subsequent enactment of Section 11A of the Central Excise and Salt Act, 1944 observed that it is pertinent to note that while enacting new Rule 10, sub-rule (2) was enacted which in terms provided that the Assistant Collector shall after considering the representation, if any, made by the person on whom notice is served under sub-rule (1) determine the amount of duty from such person; it, therefore, clearly contemplates that the Assistant Collector under new Rule 10 had to adjudicate upon the notice served under sub-rule (1) of new Rule 10; no power is conferred under sub-rule (2) of new Rule 10 on the Assistant Collector to adjudicate upon pending notices issued under substituted Rule 10, and in that view of the matter, on principle, no difference can be found between the scheme of new Rule 10 as envisaged by Noitification No. 267 of 1977 and the later scheme adopted by the rule making authority when the said rule was omitted and Section 11A was enacted on the very same day by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1976. He was entitled to continue with those proceedings and pass appropriate orders according to law." 28. The applicability of Section 6 of the Act to the case was not questioned in the case. Therefore, the decision should be read in the context of the facts of the case. It has no general application. 29. In the case of S. Krishnan v. State of Madras (AIR 1951 SC 301) this Court held that the general rule in regard to a temporary statute is that in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso-facto terminate as soon as the statute expires. The Constitution Bench of this Court considering the provision of the Preventive Detention (Amendment) Act, 1951, the constitutional validity of Sections 9(2) and 12(1), held thus : "The combined effect of Ss.9(2) (a) & 12(1) is to provide, in a certain class of cases, namely, where detention orders were in force at the commencement of the new Act, that the persons concerned could be detained for a period longer than three months if an Advisory board reports that there are sufficient grounds for detention within ten weeks from the commencement of the new Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguishable. 31. The Allahabad High Court in the case of Ajanta Paper Products, Ratanpura, Agra v. Collector of Central Excise, Kanpur [1982 (E.L.T.) 201 (All.)] also took a similar view. 32. We have carefully considered the decisions in Saurashrta Cement and Chemical Industries (supra) and Falcon Tyres case (supra). Though the judgments in these cases were rendered after the decision of the Constitution Bench in Rayala Corporation Pvt. Ltd. (supra) a different view has been taken by the High Courts for the reasons stated in the judgments. The Full Bench of the Gujarat High Court in Saurashtra Cement and Chemical Industries (supra), as it appears from the discussions in the judgment, tried to distinguish the decision of the Constitution Bench in M/s. Rayala Corporation (supra) for reasons, we are constrained to say not sound in law. The decision of the Constitution Bench is directly on the question of applicability of Section 6 of the General Clauses Act in a case where a rule is deleted or omitted by a notification and the question was answered in the negative. The Constitution Bench said that "Section 6 only applies to repeals and not to omission, and applies whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in M/s Rayala Corporation case (supra). In our considered view the ratio of the said decision squarely applies to the case on hand. 35. For the reasons set forth above we do not accept the view taken in Saurashtra Cement and Chemical Industries Ltd. (supra), in Falcon Tyres Ltd. (supra) and the other decisions taking similar view. It is not correct to say that in considering the question of maintainability of pending proceedings initiated under a particular provision of the rule after the said provision was omitted the Court is not to look for a provision in the newly added rule for continuing the pending proceedings. It is also not correct to say that the test is whether there is any provision in the rules to the effect that pending proceedings will lapse on omission of the rule under which the notice was issued. It is our considered view that in such a case the Court is to look to the provisions in the rule which has been introduced after omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision. 39. In the present case, as noted earlier, Section 6 of the General Clauses Act has no application. There is no saving provision in favour of pending proceeding. Therefore action for realisation of the amount refunded can only be taken under the new provision in accordance with the terms thereof. 40. The further question that arises for consideration in this connection is whether the Notification No. 267/77, dated 6-8-1977 by which Rule 10 was deleted contained any provision for continuance of the proceedings already initiated and whether Act 25 of 78 which introduced Section 11A of the Central Excise Act, adopted the legal device of creating a fiction by virtue of which a proceeding under Rule 10 could be deemed to be a proceeding under Section 11A of the Act. If such was the position then it could be argued that the proceeding initiated when old Rule 10 was in force could be continued on the strength of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
